Regulators seized four more banks Friday, including Pierce Commercial Bank, which received $6.8 million in taxpayer aid through the Troubled Asset Relief Program in January 2009. The latest round of closings pushed the total for the year to 143, topping the figure for all of 2009.
Pierce Commercial's parent company, Pierce County Bancorp., had not repaid its TARP aid at the time of the bank's closing, meaning the Treasury Department will likely never see that money again.
Pierce County Bancorp also had missed at least four quarterly dividend payments on the stock it issued the government in return for the TARP aid.
Pierce Commercial was the fifth TARP bank to be closed by regulators. A sixth TARP recipient, CIT Group Inc., reorganized in bankruptcy court, wiping out Treasury's $2.3 billion investment in that company, which specialized in commercial lending.
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FDIC seeks $20 million from insiders at failed bank
The Federal Deposit Insurance Corp. has authorized lawsuits against 70 officers, directors and employees of failed banks, in an effort to recover $2 billion.
The most recent suit -- the second one this year -- was filed Monday against 11 former executives and directors at The Heritage Community Bank in Glenwood, Ill.
The bank, which failed in 2009, cost the FDIC's insurance fund an estimated $41.6 million. The suit seeks to recover at least $20 million.
Heritage had four offices, $232.9 million in assets and $218.6 million in deposits
The bank leaders allegedly "failed to properly manage and supervise Heritage and its commercial real estate lending program" and exhibited "gross negligence, and breach of fiduciary duty," according to the suit.
The next court date isn't until Jan. 6, when the parties will appear before a federal judge for a status hearing. The defendants have not yet responded to the suit.
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GM prices IPO stock below Treasury's break-even
General Motors Co. announced that is has begun its initial public offering, paving the way for the Treasury Department to start reducing its 60.8 percent ownership stake in the company.
GM will sell 365 million shares of common stock at $26 to $29 per share in an offering that would reduce Treasury's ownership in the company to somewhere between 40.6 percent and 43.3 percent, according to GM's prospectus.
On Nov. 1, the company did a three-for-one stock split, which made each share less expensive.
Prior to that move, the Special Inspector General for TARP had estimated that GM's stock would need to sell for $133.78 a share for Treasury to break even on its investment.
That comes to $45.59 a share after the split -- about two-thirds higher than the mid-point of the offering.
Treasury could still rebound from the initial hit if it winds up selling its remaining shares for a higher price.
In addition to selling common stock, GM will issue 60 million shares of preferred stock with a liquidiation value of $50 per share, which would be converted to common stock three years after the purchase date. The company expects to reap $2.9 billion to $3.3 billion from the preferred stock offering.
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